Society’s Burlington House tenure remains uncertain
Steeply rising rent threatens our tenure at Burlington House. Two initiatives are underway to ensure a long, sustainable and relevant future for our Society, writes Richard Hughes, Executive Secretary
In late January 2021 the President, Mike Daly, updated the Fellowship on behalf of Council on the situation regarding the Society’s future occupancy of Burlington House. Fellows will be aware that since then a public awareness and political engagement campaign has been underway in an effort to persuade Government to reconsider its position. In parallel, a project has also begun to look at potential alternative options for the Society, should it have to relocate.
A summary of the background to the situation is provided below. Further details are available at www.geolsoc.org.uk/burlingtonhouse.
The root cause of the uncertainty surrounding the Society’s future occupancy of Burlington House is unaffordability due to steeply rising rents. The Burlington House Learned Societies (the LS: the Geological Society, Royal Society of Chemistry, Royal Astronomical Society, Linnean Society, and the Society of Antiquaries) entered an arbitration process with the landlord in 2014-15, and since then several avenues have been pursued to secure our future at Burlington House on an affordable long-term basis. The avenues pursued by the LS include:
- Renegotiation of the current unsatisfactory lease and rent escalation formula;
- The pursuit of a political solution that might provide for a long lease with concessionary rent (as granted to the Royal Academy of Arts > 150 years ago); and
- The acquisition by the Society of a long lease or virtual freehold arrangement either through purchase or on the basis of a government grant reflecting the considerable societal value of the LS.
Communications with the landlord (the Ministry of Housing, Communities and Local Government, MHCLG) continue. However, an affordable solution that would allow the Society to remain at Burlington House for the long-term remains out of reach. Discussions have led only to the offer of a lease on the same terms as the current one, with a rate of rent increase fixed at 8% per annum for the first five years of the term. To illustrate the effects of an 8% annual rent increase, Burlington House-related costs in 2020 (excluding Covid impacts) total £570k, of which £217k is rent. Total costs are forecast to increase to £710k in 2025 and £900k in 2030, the rent components of which are £320k in 2025 and £470k in 2030.
The enquiry into the purchase of a long lease was rebuffed by the landlord, who saw ‘no scope’ for entering such discussions. It should be noted that on the basis of recent valuations the cost of a long lease for the Society’s premises with no rights to sub-let would be in the region of £17.6m. The landlord also ruled out payment ‘in kind’, that is through transfer title of collections.
The Geological Society is self-financing and a financially neutral outcome is forecast for 2021. An 8% or greater escalation of our already significant annual rent will turn neutrality into an escalating annual loss over the coming years. Despite the current rent being approximately 1/3 of the landlord’s targeted market rent levels, the large footprint (almost 14,000 sq. ft.) and substantial other facilities-related costs mean that our occupation accounts for almost 10% of the Society’s annual income. In addition, the Society forecasts falling revenues in the medium term due to a substantial Open Access-driven reduction in publishing income. Falling Fellowship numbers of between 1-3% per annum since 2017 are expected to continue, given the reduction in the national oil industry and falling numbers of students choosing to study Earth sciences. These challenges have forced the Society, for the first time, to reduce its staffing levels, in part through a redundancy programme, to achieve a neutral out-turn in 2021.
With no further realistic options available for negotiation with the landlord, Council discussed the situation in August 2020. Three conclusions were forthcoming from the discussion:
- The escalating rents are an unsustainable burden on the Society’s finances, and continued residence at Burlington House threatens its future existence.
- The time has come to face up to the long-standing lease issue, with us since 2005, and consider seriously the options for alternative premises and our relocation.
- The Society should launch a final campaign to gain Government support to remain at Burlington House. Should Government be unwilling to re-consider their stance we would seek their assistance in supporting a move.
Council has directed the commencement of two initiatives. Firstly, a public awareness and political engagement campaign, managed by www.april6.com. The primary objective of this campaign is to influence Her Majesty’s Government to achieve an equitable outcome that extends the Society’s future at Burlington House on affordable rent terms and under a new lease that gives the Society freedom to pursue its strategic and business objectives.
Secondly, a project to examine the Society’s options for relocation from Burlington House began in January, chaired by past-President David Shilston.
While many Fellows have a strong attachment to the building where the Society has enjoyed continuous occupation since 1874, a large number of Fellows feel little or no attachment to it. Whatever the outcome, the Fellowship can be assured that Council is committed to seeking the best possible solution to guarantee a long, sustainable and relevant future for our Society.
If you have a query relating to the lease, please email firstname.lastname@example.org